Huawei a security risk by any gauge

Columnist

Huawei Australia board member Alexander Downer says the government's decision to deny the Chinese telco supplier Huawei a major role in the construction of the national broadband network is absurd, but it looks logical to me.

There is obviously no official register of China's telecommunications surveillance activities, but they are generally considered to be extensive and sophisticated inside and outside the country.

China believes it also gets hacked by the US, and it's odds-on to be right. China's surveillance culture is so pervasive, however, that friction with Western governments is inevitable as its economic reach expands.

There is no doubt that corporate and government interests intermingle in China, and Huawei's private ownership does not materially alter that fact.

Advertisement

The group is becoming more transparent as it grows, but its ownership and management structures are still opaque by Western standards, making matters such as chairwoman Sun Yafang's past role as an executive in China's top security agency, the Ministry of State Security, difficult to assess. It also operates within a tightly regulated industry that is nominated as strategic by the Chinese government.

One question is whether China's government-business governance amalgam creates concerns in a strategically sensitive industry such as telecommunications if China is also an aggressive user of the internet for intelligence gathering. It's difficult to argue that it does not: China has turned surveillance into an art form.

Electronic surveillance was expanded by the Chinese government in the first half of the last decade when website operators were required to nominate an authorised representative as part of their licence.

The nominees were named in the licence, and became the government's censorship enforcer in effect, overseeing teams of employees who censored website posts according to lists of disallowed words and phrases that were provided by the government on a secure network.

Government monitoring was extended to include SMS messaging about 2007. Extremely large samples of SMS messages are processed daily on massive government computer servers, and those that contain sensitive keywords are culled.

China has at times underestimated the telco market's growth as it seeks to regulate the information flow. The late arrival of an SMS in garbled form is a sign that the government servers are overloaded, for example.

It has pursued its task with dedication, however, and has developed similar oversight of social media platforms.

The first examples of ''weibo'' services that replicate Western ones such as Facebook and Twitter were also shut down by the government in 2009. Services that replaced them are run by the big state-owned telco operators, and are subject to similar censorship templates as email and SMS. Weibo subscribers are also required to use verified names and identification.

From about 2007 on, reports of Chinese cyber attacks on Western databases as diverse as Google and the Pentagon also began to appear. The attacks are never confirmed, but for the purposes of assessing the involvement of a group such as Huawei in a network as strategic as Australia's NBN, even the suspicion that China is using the internet to collect intelligence raises two questions: when do concerns cross a threshold that requires action, and what action should be taken?

The US has decided the threshold would be reached if Huawei buys or builds major telecommunications infrastructure in America, and is standing in the way of such deals. In other countries, Britain notably, Huawei has won major network tenders after agreeing to set up special teams that certify Huawei equipment does not include technology that could allow communication intercepts.

Australia's government has decided the threshold is reached in the case of the largest telecommunications project in the nation's history. If that doesn't trigger action, it's difficult to conceive a project that would. And it has opted for the US model to block Huawei rather than the British approach.

That is also consistent. The government had already singled out companies with government connections as a special concern and would have seen Huawei as government-influenced despite the lack of direct government ownership. And it also took US security concerns into account when it blocked a full takeover of OZ Minerals by China state-owned Minmetals because OZ's biggest mine Prominent Hill, was close to the Woomera weapons testing range. Huawei mightn't like being quarantined from the NBN, but it can hardly be surprised.